The U.S. Olympic Committee will sell Team USA merchandise to the general public at the Olympics for the first time, a move projected to triple retail revenue over the 2012 London Games.
But getting there was complicated. To invite the public into the Team USA Shop at USA House, the USOC had to obtain clearance from local organizers and the International Olympic Committee, and establish a Brazilian business entity.
“We’re used to going around the world at the USOC, and Brazil is notorious for being a particularly regulated society as far as the way their business operations work,” said Chief Financial Officer Morane Kerek, who had assistance from USOC sponsor Deloitte and Brazilian law firm Veirano.
The USA House — officially registered in Brazil as USOC Hospitality, Serviços, Comércio, Importação e Exportação LTDA — will include two entrances to its 3,500-square-foot store: one leading to the rest of the invitation-only hospitality house, per usual, and another entering directly from the street adjacent to Ipanema Beach.
“As we try to grow our merchandise business and try to grow fans, we felt the opportunity, the location and the timing was right,” said Peter Zeytoonjian, USOC managing director of marketing. “In the past, in other locations it didn’t make sense.”
The IOC has no prohibition on public retail from country houses, but traditionally, public merchandising is the exclusive right of the local organizing committee, Zeytoonjian said. That meant Team USA gear was available only to invited guests of the house in the past. This year, the IOC said the USOC was free to open a store as long as it complied with national and Rio 2016 conditions, Zeytoonjian said.
In 2015, the USOC and its foundation jointly formed the local entity (Brazilian businesses must have two founding entities) and hired Pedro Rego Monteiro, executive director of the marketing agency Effect Sport, to act as a titular chief executive, Kerek said. The new business had to meet undisclosed capital requirements.
From there, the business also had to meet local hiring standards. USOC sponsor Adecco is helping recruit 40 to 50 Brazilian workers, Zeytoonjian said. The staff will be about twice the size of the London retail staff.
The USOC expects to triple revenue over the London Games, when the internal, invitation-only store posted $2.2 million in sales, to $6.6 million. The USOC is projecting nearly $400 million in total revenue this year.
The store will carry Team USA goods from licensees and sponsors Nike, Ralph Lauren, Oakley, Alex and Ani, Swarovski, Outerstuff, Olympic pin maker Honav USA, and Swatch, which for the first time is making Team USA-branded watches in addition to its general Rio 2016 line. Olympics sponsor Visa is installing the payment system.
Going public was partly driven by the USA House’s location, in a school in the upscale Ipanema Beach area. “There is heavy beach and foot traffic, so we expect it to be busy,” Zeytoonjian said. “I would be speculating if I threw out any number in terms of the amount of people.”
